A supportive enabling environment, promoting climate smart agriculture, and increase in farm productivity, top agriculture SMEs’ wish list in the 2022 Africa Agribusiness Outlook Report
NAIROBI, March 31, 2022 – Access to financial services and increasing productivity on small farms are priority concerns for businesses in the continent’s agricultural sector, according to the Africa Agribusiness Outlook 2022 report. The report also indicates rising concerns about climate change among the business community, which is the biggest threat to agricultural production in the continent. Promoting climate smart agriculture was identified as a top priority by the small and medium-sized businesses (SMEs) as a key driver for transformation and development of resilience.
The report, which is jointly produced by AGRA and KPMG East Africa, indicates that SMEs in the sector want more flexible financing structures that support business growth while providing flexibility in responding to market shocks and emerging innovations. They also want policy actions to be introduced to transform the agriculture sector and boost productivity. Weak policy, legal and regulatory environments were identified as a barrier to growth in the sector and SMEs called for a more enabling environment to support their operations and growth.
The Africa Agribusiness Outlook 2022 is the second edition of the annual report, developed from surveys with agribusinesses in 13 countries across the continent on how to improve the growth, investment, and competitiveness of agricultural SMEs. The report serves as a barometer, providing insights into priority areas for the private sector, which if resolved will boost investment into the sector and help them scale and become more competitive.
Speaking during the launch of the report, AGRA’s president, Dr. Agnes Kalibata said: “Agribusiness holds the key to Africa’s economic recovery in a challenging world. The resilience and determination of the continent’s agribusinesses to keep moving forward are inspiring. At AGRA, we are committed to supporting the development of policies and innovative financial solutions to help address challenges that SMEs and businesses in general continue to face.”
The report notes that increasing agricultural output is key for the continent’s economic recovery from the effects of the pandemic. The agribusinesses faulted financial services providers for setting near- impossible terms and conditions for accessing financing even when they qualify. They recommended that the private commercial finance institutions and donors, including philanthropists, consider blending finance to create concessional finance that delivers sufficient returns and provides the necessary patient capital that so many agribusinesses require.
Benson Ndung’u, Chief Executive Officer and Senior Partner at KPMG East Africa noted: “Any response to any challenge that the agricultural sector faces, requires a systemic multi-sectoral approach. Collaborations and partnerships will help drive agricultural transformation since they lead to knowledge sharing which is key for Africa’s agribusinesses in supporting the building of healthier, more sustainable and more equitable food systems.”
With agribusiness leaders showing concerns about the effects of climate change on the sector, the Report recommends that businesses develop innovative solutions which will enhance resilience to impacts of climate change. These include implementing and scaling business models and innovations that reduce the risk of climate change and ecological damage.
According to the Africa Agribusiness Outlook 2022, SMEs are also keen on increased investments in affordable smart technologies for small farms as part of a measure to transform agriculture on the continent. The businesses, even well-established, mid-sized, high-growth, high-potential businesses, would like obstacles removed from their expansion into regional and international markets, which are critical to achieving scale. Knowledge gaps emerged as a major challenge facing agribusinesses in Africa today with sixty percent of the CEOs mentioning investment in people as one of the key agribusiness investment priorities.
For more information on the Africa Agribusiness Outlook report, please visit agra.org/agribusinessoutlook. For media inquiries, please contact: Rebecca Weaver, firstname.lastname@example.orgemail@example.com| firstname.lastname@example.org
Notes to Editors:
About Africa Agribusiness Outlook survey
The annual Africa Agribusiness Outlook is a survey that is conducted annually on agribusiness CEOs by KPMG to gain insights into their top priorities, how they are addressing challenges, and what they see as opportunities.
The second edition focused on the enabling environment for agribusinesses, specifically targeted an increased number of female leaders, and expanded its geographic scope to cover 13 focus countries, up from 7 in the 2020 inaugural Survey.
What are the top priorities for agribusiness as identified by the survey?
- More flexible financing structures for agriculture and agribusiness sector to support business growth and provide flexibility to respond to market shocks and emerging innovation
- Increased productivity on small farms.
- Catalytic financing for the entire agricultural value chain, not just technology
- Blended finance initiatives for agribusinesses
- Increase access to small affordable smart technologies for small farms
- Promotion of climate-smart agriculture as a key driver for transformation and development of resilience
- Increased public-private initiatives that fund and accelerate developments in the agribusiness space
- Develop inclusive supply chains involving smallholder farmers. This is critical to our sourcing and risk management strategy
- Access to finance for climate adaptation initiatives or climate-smart agriculture in the supply chain and at the company level
- Develop multi-stakeholder platforms and partnerships for driving agricultural transformation
Which sectors in agribusiness?
Key sub-sectors represented in the survey include Agriculture production, processing, trading, financial services, information services and technology, logistics and retail.
Established in 2006, AGRA is an African-led and Africa-based institution that puts smallholder farmers at the center of the continent’s growing economy by transforming agriculture from a solitary struggle to survive into farming as a business that thrives. Together with our partners, we catalyze and sustain an inclusive agricultural transformation to increase incomes and improve food security for 30 million farming households in 11 African countries by 2021.
About KPMG International
KPMG is a global organization of independent professional services firms providing Audit, Tax, and Advisory services. KPMG is the brand under which the member firms of KPMG International Limited (“KPMG International”) operate and provide professional services. “KPMG” is used to refer to individual member firms within the KPMG organization or to one or more member firms collectively. KPMG firms operate in 145 countries and territories with more than 236,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Each KPMG member firm is responsible for its obligations and liabilities. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients. Our East Africa practice comprises Kenya, Uganda, Tanzania, and Rwanda. KPMG East Africa firm has 23 partners and over 1000 professional staff. The Nairobi office serves as the regional coordinating office providing the required networking to facilitate the delivery of services on a timely basis to meet and exceed our clients’ expectations.